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dc.contributor.authorLUCCHETTA, Marcella
dc.date.accessioned2010-10-05T08:22:24Z
dc.date.available2010-10-05T08:22:24Z
dc.date.issued2010
dc.identifier.issn1028-3625
dc.identifier.urihttp://hdl.handle.net/1814/14633
dc.description.abstractThis paper explores theoretically the implications of bank market structure and banking system risks concentration for the functioning of interbank markets. It employs a simple model where banks are exposed to both credit and liquidity risk, there is no asymmetric information, no market power, no friction in secondary markets and deposit contracts are fully contingent. We show that (a) the concentration of risks induced by changes in bank market structure makes interbank market breakdowns more likely; (b) welfare monotonically decreases in risk concentration; and (c) risk concentration and a high probability of interbank market breakdowns can be driven by risk control diseconomies of scale and scope and increases in financial firms’ size. As banking systems become more concentrated, improvement of risk control technologies in financial institutions and in regulatory bodies appear as important as other policies considered in the literature to minimize the probability of interbank market breakdowns.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.relation.ispartofseriesEUI RSCAS
dc.relation.ispartofseries2010/76
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectbank market structureen
dc.subjectsystemic risken
dc.subjectinterbank marketsen
dc.titleBank Market Structure, Systemic Risk, and Interbank Market Breakdownsen
dc.typeWorking Paperen
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